ContentsTopic page No.

Executive Summary 02

History of Rail Transport 03

Pakistan Railways 05History 07

After independence 10

Mission statement 11

Vision Statement 12

Routes 14

Traffic 18

Problems face by Pakistan railway 19

Pakistan Railway working on rehabilitation of railway system 32

Pakistan Locomotive Factory, Risalpur 36

Accidents 37

Future developments 44

Chinese bank withholds funds for Pakistan Railways 47

World Bank may be asked to inject funds into Pakistan Railways 49

Conclusion 51

Recommendation 52

References 53 EXECUTIVE SUMMARYRailway Industry plays a vital role in a countrys economic system. This industry is a back bone for a country. If this industry is being used & operated effectively and proper polices are applied for its development then it could provide a very profitable business to its country which may bring in a positive change in a countrys economy.

On the other side, if this industry is being operated under the supervision of ineligible authorities and not properly overlooked by the Government then not only Railway Industry Will Suffer from Losses also the country will also have to endure.

Unfortunately, Pakistan Railway is also suffering from the reason mentioned above. It is an important source of transportation throughout Pakistan. It carries millions of passengers throughout the country. It is been used to carry huge freight in Pakistan. This cheap and safe mode for passengers is now facing a number of issues. A number of services of Pakistan Railways have been cancelled, suspended or terminated and many more will be suspended in near future because of mismanagement and shortage of locomotives, fuel and money. The chapter of all major services, from Lahore to Karachi, has been closed. The incompetent administration has failed to attain locomotives from any quarter of the world. Passengers are suffering due to mismanagement of administration. Pakistan Railways decision to suspend goods train service due to severe shortage of locomotives and fuel is another blow to this organization.

The railway has retired 102 of 220 trains and relies on handouts of Rs. 2.2 billion a month just to pay salaries and pensions. It is also facing predictable losses of Rs. 35 billion in fiscal year July 2011 to June 2012. It is now basically financially bankrupt organization. In other words it is on the edge of financial collapse. Finally, we will determine major Factors responsible For Pakistan Railways Crises accordingly to people views and secondary data.PAKISTAN RAILWAY

History of Rail Transport:

The history of rail transport dates back nearly 500 years and include systems with man or horse power and rails ofwood or stone. Modern rail transport systems first appeared in England in the 1820s. These systems, which made use ofthe steam locomotive, were the first practical forms ofmechanized land transport, and they remained the primary form of mechanized land transport for the next 100 years. As the colliery and quarry tram ways and wagon ways grew longer, the possibility of using the technology for the public conveyance of goods suggested itself. On 26 July1803, Jessop opened the Surrey Iron Railway in south London- arguably, the world's first public railway, albeit a horse-drawn one. It was not a railway in the modern sense of the word, as it functioned like a turnpike road.

Manchester Railway. Unfortunately, he became bankrupt and his schemes were taken over by George Stephenson and others. However, he is credited by many historians with the title of "Father of the Railway. It was not until 1825 that the success of the Stockton and Darlington Railway proved that the railways could be made as useful to the general shipping public as to the colliery owner. This railway broke new ground by using rails made of rolled wrought iron, produced at Bedlington Iron works in Northumberland. Such rails were stronger. This railway linked the town of Darlington with the port ofStockton-on-Tees, and was intended to enable localcollieries (which were connected to the line by short branches) to transport their coal to the docks. As this would constitute the bulk of the traffic, the company took the important step ofoffering to haul the colliery wagons or caldronsby locomotive power, something that required a scheduled or timetabled service of trains. However, the line also functioned as a toll railway, where private horse drawn wagons could be operated upon it.

This curious hybrid of a system (which also included, at one stage, a horse drawn passenger wagon) could not last, and within afew years, traffic was restricted to timetabled trains. The success of the Stockton and Darlington encouraged the rich investors of the rapidly industrializing North West ofEngland to embark upon a project to link the rich cotton manufacturing town of Manchester with the thriving port ofLiverpool. The Liverpool and Manchester Railway was the first modern railway, in that both the goods and passenger traffic was operated by scheduled ortimetabled locomotive hauled trains. At the time of its construction, there was still a serious doubt that locomotives could maintain a regular service over the distance involved. Awidely reported competition was held in 1829 called the Rainhill Trials, to find the most suitable steam engine to haul the trains. A number of locomotives were entered, including Novelty, Perseverance, and Sans Peril. The winner was Stephensons Rocket, which had superior steaming qualities as a consequence of the installation of a multi-tubular boiler (suggested by Henry Booth, a director of the railway company).The promoters were mainly interested in goods traffic, but after the line opened on 15 September 1830, they found to their amazement that passenger traffic was just as remunerative. The success of the Liverpool and Manchester railway influenced the development of railwayselsewhere in Britain and abroad. The company hosted many visiting deputations from other railway projects, and many railway men received their early training and experience upon this line. It must be remembered that the Liverpool and Manchester line was still a short one (35 miles (56 km)), linking two towns within an English shire county. The worlds first trunk line can be said to be the Grand Junction Railway, opening in 1837, and linking a mid point on the Liverpool and Manchester Railway with Birmingham, by way of Crewe, Stafford, and Wolverhampton.

North Western State Railways, which was later on re named as North Western Railway(NWR). This would eventually become Pakistan Railways in 1947.Anotherrailwayline betweenKarachiand Keamari was opened on June 16th, 1889. In 1897, the line from Keamari to Kotri was doubled. By1898asthenetworkbegantogrow,another proposed railway line was in the works from Peshawar to Karachi. It closely followed the route taken by AlexanderGreat and his army while marching through the Hindu Kushto the Arabian Sea. During the early 20th century, railway lines were also laid down between Peshawar and Rawalpindi and Rawalpindi to Lahore. Different sections on the existing main line from Peshawar and branch lines were constructed in the last quarter of 19th century and early 20th century. Pakistan Railways

Pakistan Railways (reporting mark PR) is a national state-owned rail transport service of Pakistan, head-quartered in Lahore. It is administered by the federal government under the Ministry of Railways. PR provides an important mode of transportation throughout Pakistan. It is commonly referred to as the "life line of the country", by aiding in large-scale movement of people and freight throughout Pakistan. The current chairman is Shahid Hussain Raja.

Current StatePakistan, despite its moderate size, has a largely dysfunctional railway system. As of mid 2011, it was decided to stop all goods train haulage due to severe shortage of locomotives and fuel. The financially bankrupt organization, despite bailouts, has not been able to emerge out of its troubles leading to cancellation of as many as 115 railway services. The decision has left ordinary Pakistanis at the mercy of bus operators for long distance travel. As of 2011, the PR network cancelled many trains and AC services in many trains were stopped. On 29 December 2011, PR restored freight train service from Karachi to upcountry.

History:Before independence:The idea of a rail network was first thought of in 1847, with the possibility of Karachi becoming a major seaport. Sir Henry Edward Frere, who was appointed as the Commissioner of Sindh, sought permission from Lord Dalhousie to begin a survey for a Karachi Seaport and a survey for a railway line in 1858. The proposed railway line would be laid from Karachi (city) to Kotri. A steamboat service on the Indus and Chenab rivers would connect Kotri to Multan and from there another railway line would be laid to Lahore and beyond.On May 13, 1861, the first railway line was opened to the public, between Karachi (city) and Kotri, with a total distance of 105 miles (169km).

By 1886, there were four railway companies operating in what would become Pakistan. Scinde (sindh) Railways

Indian Fiotilla Company

Punjab Railway

Delhi Railways These were amalgamated into the Scinde, Punjab & Delhi Railways Company and purchased by the Secretary of State for India in 1885, and in January 1886 formed the North Western State Railways, which was later on renamed as North Western Railway (NWR). This would eventually become Pakistan Railways in 1947.Another railway line between Karachi and Keamari was opened on June 16, 1889. In 1897, the line from Keamari to Kotri was doubled.It was the year 1857 when the idea was suggested by William Andrew (Chairman of Scinde, Punjab and Delhi Railway) that the railways to the Bolan Pass would have strategic role in responding to any threat by Russia. During the second Afghan War (187880) between Britain and Afghanistan, a new urgency was needed to construct a Railway line up to Quetta in order to get easier access to the frontier. On 18 September 1879, under the orders of Viceroy Council, work begun on laying the railway tracks and after four months the first 215km of line from Ruk to Sibi was completed and become operational in January 1880. Beyond Sibi the terrain was very difficult. After immense difficulties and harsh weather conditions, it was March 1887 when the railway line of over 320km long finally reached Quetta.

By 1898, as the network began to grow, another proposed railway line was in the works from Peshawar to Karachi. It closely followed the route taken by Alexander The Great and his army while marching through the Hindu Kush to the Arabian Sea. During the early 20th century, railway lines were also laid down between Peshawar and Rawalpindi and Rawalpindi to Lahore. Different sections on the existing main line from Peshawar and branch lines were constructed in the last quarter of 19th century and early 20th century.

Khyber Steam Train Safari

After independence

In 1947, at the time of independence, 1,947 route miles (3,133km) of North Western Railways were transferred to India, leaving 5,048 route miles (8,122km) to Pakistan.

In 1954, the railway line was extended to Mardan and Charsada, and in 1956 the Jacobabad-Kashmore 2ft6in(762mm) gauge line was converted into broad gauge. In 1961, the Pakistani portion of North Western Railways was renamed Pakistan Railways. The Kot Adu-Kashmore line was constructed between 1969 and 1973 providing an alternative route from Karachi to northern Pakistan.

To provide a safe reliable, modern, efficient and costeffectiveinfrastructuretoitscustomers:tocontributeinbuildingtheeconomyofPakistanandtolookafterthe welfare of its employees.Vision Statement

Increasing share in freight and passenger market. Restoring confidence of the passenger and trading community. Development of human resource need base coupled with improvement and development of management, infrastructure and rolling stock.

Encourage private sector in public private partnership, both for development of infrastructure and train operations. Diversify all its non-coreactivities to make them self-sustainable units

ControversiesPakistan Railways has been the subject of a number of investigations by the National Accountability Bureau (NAB), Pakistans elite anti-corruption agency, after concerns were raised about contracts relating to the repair, upgrade and purchase of locomotives; unauthorized payments of over Rs220 million from its Accountants Department; the disposal of scrap; and the theft of consignments from cargo trains. In 2012 it was reported that these cases were referred to the NAB for investigation by the Supreme Court of Pakistan.

In March 2012, Pakistan Railways General Manager, Saeed Akhtar, was arrested by the NAB on charges of misuse of authority and alleged involvement in the misappropriation of Rs600 million, relating to the sale of scrap at a below market value rate.

GaugePakistan Railways had a mixture of gauges, Broad gauge (1,676mm or 5ft 6 in), Meter gauge (1,000mm or 3ft 3 3/8 in) and Narrow gauge (762mm or 2ft 6 in). Few Meter gauge & Narrow gauge railway lines have converted in to Broad gauge and remaining have abandoned or dismantled. Now only Broad gauge railway lines are operational in Pakistan Railways network.

Axle load limitPakistan Railways broad gauge railway track Axle load limit is 22.86 tones except Rohri-Quetta & Quetta-Chaman railway lines which Axle load limit is 17.78 tones and Spezand-Zahedan railway line which Axle load limit is 17.27 tones.

SpeedThe maximum Speed of Pakistan Railways is 120km/h. Some sections of Karachi-Lahore main railway line allow 120km/h speed. Work is in progress to improve railway track on Karachi-Khanpur section to increase speed to 140km/h.Important Railway Lines Karachi-Peshawar Main Line via Rohri, Khanewal, Lahore & Rawalpindi

Rohri-Quetta Khanewal-Faisalabad Lahore-Faisalabad Lahore-Sialkot via Narowal

Routes

Important Domestic Routes Karachi-Lahore Karachi-Faisalabad Karachi-Rawalpindi

Karachi-Peshawar Rawalpindi-Quetta Lahore-Quetta Lahore-Rawalpindi Karachi-Quetta Cantt. Station

Lahore-Faisalabad Lahore-Sialkot Time Table

Karachi Lahore Peshawar

Train No.:27417151107101103

Classes:P,L,EP,L,EA,1,L,EA,L,EA,1,EP,L,EP,L,EP,L,E

Karachi (Cantonment)depart 07:00 day 1 16:00 day 1 17:00 day 1 18:00 day 1 22:00 day 1---

Hyderabadarr/dep 09:45 day 1 18:40 day 1 19:45 day 1 20:35 day 1 00:50 day 2 - - -

Rohriarr/dep 14:50 day 1 23:20 day 1 00:40 day 2 01:05 day 2 05:40 day 2 - - -

Multan (Cantonment)arr/dep | | 07:20 day 2 | 14:03 day 2 - - -

Lahore (Junction)arr/dep 02:45 day 1 10:15 day 2 14:15 day 2 12:00 day 2 21:40 day 207:0007:3016:30

Rawalpindiarr/dep-- 19:30 day 2- 03:10 day 311:0012:3021:30

Attock arr/dep---- 04:30 day 3---

Peshawar (City)arrive - - - - 06:20 day 3 - - -

Peshawar (Cantonment)

Karachi Quetta

Quetta Karachi

Train No.:3

Train No:4

Classes:1,E

Classes:1,E

Karachi (City) depart:17:00 day 1

Quetta depart:11:00 day 1

Karachi (Cantonment) depart:17:20 day 1

Karachi (Cantonment) arrive:08:00 day 2

Quetta arrive:14:10 day 2

Karachi (City) arrive:08:25 day 2

International Routes

HYPERLINK "http://en.wikipedia.org/wiki/Transportation_in_Iran" \o "Transportation in Iran"Iran A broad gauge railway line runs from Zahedan to Quetta, and a standard gauge line is finished from Zahedan to Kerman in central Iran, linking with the rest of the Iranian rail network. On May 18, 2007, a MOU for rail cooperation was signed by Pakistan and Iran under which the line will be completed by December 2008. Now that the rail systems are linked up at Zahedan, there is a break-of-gauge between the Islamic Republic of Iran Railways standard gauge tracks and Pakistan Railways broad gauge.

India Thar Express to Karachi and the more famous Samjhauta Express international train from Lahore, Pakistan to Amritsar (Attari) and Delhi, India.

Afghanistan Currently there is no rail link to Afghanistan since no railway network is present in that country, however Pakistan Rail has proposed to help build an Afghan Rail Network in three phases. The first phase will stretch from the Chaman to Spin Boldak in Afghanistan. The second phase will extend line to Kandahar and the third phase will eventually connect to Herat. From there, the line will be extended to Khushka, Turkmenistan. The final phase would link 1,676mm(5ft6in) gauge with Central Asian 1,520mm(4ft11 56in) gauge. It is not clear where the break-of-gauge station will be. The proposed line will also be connected the port town of Gwadar via Dalbadin and Taftan, thus connecting the port town to Central Asia.

HYPERLINK "http://en.wikipedia.org/wiki/Transportation_in_the_People%27s_Republic_of_China" \o "Transportation in the People's Republic of China"China There is no link with China however, on February 28, 2007 contracts were awarded for feasibility studies on a proposed line from Havelian via the Khunjerab Pass at 4730 m above sea level, to the Chinese railhead at Kashgar, a distance of about 750km.

HYPERLINK "http://en.wikipedia.org/wiki/Transportation_in_Turkey" \o "Transportation in Turkey"Turkey An Istanbul-Tehran-Islamabad passenger rail service was proposed recently. Meanwhile a container train service was launched by the Prime Minister of Pakistan Yousuf Raza Gilani between Islamabad and Istanbul on 14 August 2009. The first train carried 20 containers with a capacity of around 750t (738long tons; 827short tons) and will travel 6,500km (4,000mi) from Islamabad, through Tehran, Iran and on to Istanbul in two weeks' time. According to the Minister for Railways Ghulam Ahmad Bilour, after the trial of the container train service, a passenger train will be launched. There are also hopes the route will eventually provide a link to Europe and Central Asia, and carry passengers.

Turkmenistan via Afghanistan (proposed)

Traffic PassengerPassenger traffic comprises 50% of the total revenue annually. During 1999-2000, this amounted to Rs.4.8billion. Pakistan Railways carries 65million passengers annually and daily operates 228 mails, express and passenger trains. Daily, PR carries an average of 178,000 people. Pakistan Railways also operates special trains during occasions such as Eid ul Fitr, Eid ul Azha, Independence Day and Raiwind Ijtema.

FreightThe Freight Business Unit, with 12,000 personnel, operates over 200 freight stations on the railway network. The Unit serves the Ports of Karachi and Bin Qasim as well as all four provinces of the country and generates revenue from the movement of agricultural, industrial and imported products such as petroleum oil & lubricants (POL), wheat, coal, fertilizer, rock phosphate, cement and sugar. About 39% of the revenue is generated from the transportation of POL products, 19% from imported wheat, fertilizer and rock phosphate. The remaining 42% is earned from domestic traffic.

The Freight Business Unit offers services to meet customer requirements and reduce costs through efficiency, innovation and modernization. All possible efforts are made to increase revenues and pass on the benefits to customers. The Freight Business Unit is headed by an additional General Manager.

The Freight Rates structure is based on market trends, particularly of road transport, which is the Railways' main competitor. The freight rates are no longer rigid but flexible, depending on the lead, peak-off peak season, and quantum offered.As on August 14, 2009 by Prime Minister Yousuf Raza Gilani between Islamabad and Istanbul via Tehran. The first train carried 20 containers with a capacity of around 750t (738long tons; 827short tons) and will travel 6,500km (4,000mi) from Islamabad, through Tehran, Iran and on to Istanbul in two weeks' time. According to the Minister for Railways Ghulam Ahmad Bilour, after the trial of the container train service, a passenger train will be launched. There are also hopes the route will eventually provide a link to Europe and Central Asia, and carry passengers.Problems face by Pakistan railway Sources say a $400 million US loan to purchase 150 locomotives might be halted due to no govt response No new scheme in PSDP 2010-11, major part of ongoing projects delayed The Pakistan Railways (PR) faces a financial deficit of around Rs 40 billion due to corruption, lack of locomotives and losses incurred by running passenger trains, while Rs 21 billion was being spent on wages and pensions.

The department has 16,433 carriage wagons for commercial purposes, out of which 8,005 have become out of order. To increase its revenue, the PR has decided to import an additional 530 carriage wagons, while the department had already imported 1,300 commercial carriages from China, sources said.

A source said that the US has offered a $400 million export-import bank loan for immediate purchase of 150 locomotives by Pakistan Railways, which may come to a halt due to massive engine failures. Railways officials had written a letter to the federal government seeking permission to accept the loan as they find themselves in a desperate situation after failure of the Chinese locomotives, and refusal of the Chinese company to honor the warranty on the already purchased engines, however the department was yet to receive any positive response by the federal government, he added. Delayed: Due to the overall unsatisfactory situation and the high deficit of the PR, no new schemes had been introduced in the Public Sector Development Programme (PSDP) 2010-11, while a major part of the ongoing projects has also been delayed.Out of the total budget allocated for railways during the ongoing fiscal year 2010-11, Rs 5.982 billion has been earmarked for repairs and maintenance of commercial and passenger wagons, Rs 800 million for rehabilitation of railway tracks under the rehabilitation plan, against the estimated cost for the project at Rs 9.405 billion, Rs 200 million for doubling of the track on Lodhran-Khanewal section with Foreign Exchange Component (FEC) of Rs 150 million against the total demand of Rs 3.297 billion for the same project, and Rs.250 million for procurement/manufacture of 530 high capacity wagons with FEC of Rs 20 million against the total estimated cost of Rs 4.134 billion. Sources said that as per the rules and procedures of the Finance Ministry, the finance division would release 20 percent amount of the total budget of railways amounting to Rs 12.5 billion for the first quarter (July-September) of financial year, 2010-11, while funds under the PSDP would now be released only for those projects which are nearly completed, and it would be the cause of delay in new projects.

Similarly, Rs 2.159 billion has been allocated for procurement and manufacture of 75 Nos. New DE Locomotives included FEC of Rs 1.359 billion against the total estimated cost of Rs 12.700 billion regarding the same project. Rs 1.817 billion has been allocated for the replacement of old signaling gear from Khanewal-Shahdra Section with FEC amount of Rs 1.2 billion against the total estimated cost of Rs 10.720 billion for the said ongoing project. The Ministry of Railways seems totally satisfied with its decision in July, of closing down 13 passenger trains, while more passenger trains would be suspended if the deficit continued to increase in the coming days. LAHORE: Employees of Pakistan Railways Advisory and Consultancy Services (PRACS), an ancillary of Pakistan Railways, have expressed suspicion and are planning to approach the court to prevent the release of the sanctioned loan of Rs6.1 billion for the railways, fearing the money will put credibility of PRACS at stake.However, on the other side, the management of Pakistan Railways and PRACS, following approvals, guarantees and submission of documents, are anxiously waiting for the release of the loan.

The employees, under the cover of PRACS Employees Association, are of the view that the loan will not be used for the repair of locomotives and may be misused by railway officials. The association represents lower as well as some high-ranking officers of PRACS.

Cash-strapped railways got the Rs6.1 billion loan in January through its profitable ancillary PRACS. PRACS was chosen for the purpose as no bank and financial institution was ready to trust the loss-making railways.

The loan, provided by the National Bank of Pakistan through a consortium, has been extended for a five-year period at an interest rate of 13%. PRACS will pay back the loan in 10 biannual installments with guarantees from the railways and finance ministry.

With the loan, PRACS will rehabilitate about 96 locomotives and has already selected five retired and on-duty engineers for the job.

Talking to The Express Tribune, Employees Association President Khalid Bashir said total assets of PRACS, including properties, were merely worth Rs1 billion and was surprised over the approval of the loan.

Why PRACS is being awarded with such a huge loan for such an entity where trust is lacking due to corruption scandals, he asked.

Bashir, who is director commercialisation in PRACS, said the railways had taken responsibility for repaying the loan but questioned from where it would arrange the money for paying huge installments, when it itself was relying on government support to pay salaries and pensions to the employees.

We will file a petition in the Supreme Court to block the loan, which may lead PRACS to bankruptcy, putting the future of over 800 employees at stake, Bashir added.

PRACS has hired some retired officers of the railways on key posts at high salaries for the project. What these officers will do after retirement when they did not deliver anything significant during their service, he asked.

Talking to The Express Tribune, PRACS Managing Director Junaid Quraishi, however, stressed that the employees had nothing to do with such matters and if they wanted to go to the court they were not restricted.

I take responsibility for saving PRACS. All documents and guarantees have already been signed by the railways and finance ministry, he said.

Without locomotives, railway operations would discontinue and if this happened, then how PRACS would continue to run, he asked. We hope that the bank will update us about the loan on coming Monday as we have already waited for a long period.

Quraishi said PRACS would rehabilitate about 36 locomotives in the first year and after repair each locomotive would give the railways revenue of around Rs3.5 million per day.

Railway officials are waiting for the release of the loan, but their hopes are alive as the Economic Coordination Committee (ECC) has once again given the go-ahead.

Published in The Express Tribune, March 31st, 2012.Railways face Rs 40bn deficit due to corruption

* Sources say a $400 million US loan to purchase 150 locomotives might be halted due to no govt response

* No new scheme in PSDP 2010-11, major part of ongoing projects delayed

By Zeeshan Javaid

ISLAMABAD: The Pakistan Railways (PR) faces a financial deficit of around Rs 40 billion due to corruption, lack of locomotives and losses incurred by running passenger trains, while Rs 21 billion was being spent on wages and pensions.

The department has 16,433 carriage wagons for commercial purposes, out of which 8,005 have become out of order. To increase its revenue, the PR has decided to import an additional 530 carriage wagons, while the department had already imported 1,300 commercial carriages from China, sources said.

A source said that the US has offered a $400 million export-import bank loan for immediate purchase of 150 locomotives by Pakistan Railways, which may come to a halt due to massive engine failures.

Railways officials had written a letter to the federal government seeking permission to accept the loan as they find themselves in a desperate situation after failure of the Chinese locomotives, and refusal of the Chinese company to honour the warranty on the already purchased engines, however the department was yet to receive any positive response by the federal government, he added.

Delayed: Due to the overall unsatisfactory situation and the high deficit of the PR, no new schemes had been introduced in the Public Sector Development Programme (PSDP) 2010-11, while a major part of the ongoing projects has also been delayed.

Out of the total budget allocated for railways during the ongoing fiscal year 2010-11, Rs 5.982 billion has been earmarked for repairs and maintenance of commercial and passenger wagons, Rs 800 million for rehabilitation of railway tracks under the rehabilitation plan, against the estimated cost for the project at Rs 9.405 billion, Rs 200 million for doubling of the track on Lodhran-Khanewal section with Foreign Exchange Component (FEC) of Rs 150 million against the total demand of Rs 3.297 billion for the same project, and Rs.250 million for procurement/manufacture of 530 high capacity wagons with FEC of Rs 20 million against the total estimated cost of Rs 4.134 billion. Sources said that as per the rules and procedures of the Finance Ministry, the finance division would release 20 percent amount of the total budget of railways amounting to Rs 12.5 billion for the first quarter (July-September) of financial year, 2010-11, while funds under the PSDP would now be released only for those projects which are nearly completed, and it would be the cause of delay in new projects.

Similarly, Rs 2.159 billion has been allocated for procurement and manufacture of 75 Nos. New DE Locomotives included FEC of Rs 1.359 billion against the total estimated cost of Rs 12.700 billion regarding the same project.

Rs 1.817 billion has been allocated for the replacement of old signaling gear from Khanewal-Shahdra Section with FEC amount of Rs 1.2 billion against the total estimated cost of Rs 10.720 billion for the said ongoing project. The Ministry of Railways seems totally satisfied with its decision in July, of closing down 13 passenger trains, while more passenger trains would be suspended if the deficit continued to increase in the coming days.Pakistan Railways crisis

Pakistan Railways, lifeline of the country, is a national state-run transport service. It is under the administration of federal government and its head quarter is in Lahore. It is an important source of transportation throughout Pakistan. It carries millions of passengers throughout the country. It used to carry huge freight in Pakistan. This cheap and safe mode for passengers is now facing a number of issues. A number of services of Pakistan Railways have been cancelled, suspended or terminated and many more will be suspended in near future because of mismanagement and shortage of locomotives, fuel and money. The chapter of all major services, from Lahore to Karachi, has been closed. It is pertinent to mention that all AC services have been stopped. The incompetent administration has failed to attain locomotives from any quarter of the world. Passengers are suffering due to mismanagement of administration. Pakistan Railways decision to suspend goods train service due to severe shortage of locomotives and fuel is another blow to this organization. It is now basically financially bankrupt organization. In other words it is on the verge of financial collapse.

The political interference, nepotism, corruption, poor maintenance of tracks & bridges and mismanagement in almost every field are the major causes of failure of Pakistan Railways. Pakistan Railways purchased 69 completely built locomotive units from China under 2003 agreement. These are about 37% cheaper than the European locomotives but considered to be faulty. It is stated that 32 of these have already been scraped. Dong Fang Electric Corporation has been severely criticized for producing low quality locomotives. The other viewpoint is that misuse of the machinery was the major cause of the failure of Chinese locomotives. According to Sheikh Rashid, the former railway minister, crankshafts of locomotives worth Rs10 million were damaged because of the use of substandard lubrication oil.

It may be mentioned here that normally a locomotive consists of six traction motors while the Pakistan Railways is operating them with only three or four motors. This is the major cause of mid-way breakdown of trains. The passengers, in such a case, have to wait for a long time till repair or replacement of faulty engine takes place. Naturally trains are too late and passengers can be seen sitting at platforms with their luggage. A number of trains lack facility of light at nights because of the failure of the generators and ill attitude of management. Another reason that prevents people to go by train is increase in corruption by the ticketing officials. The reservation of birth is an uphill task. There are complaints that reservation is confirmed after receiving bribe of hundred or more rupees by passengers. Pakistan Railways is no more the best choice to travel for the passengers.

Haji Ghulam Ahmed Bilour, federal minister for Pakistan Railways, is a very controversial figure. He is considered to be somewhat responsible for the deteriorating situation of Pakistan Railways. His viewpoint is that the whole railway system is obsolete. He complains that half of the total locomotives are out of order. Almost 86 % bridges are more than 100 years old. The trains, tracks and machinery are outdated or faulty. He says that Pakistan needs 25 to 30 engines annually. He is now making a plan to repair, hire or lease locomotives in collaboration with the private sector. Moreover, he believes that a bailout package can be helpful to overpower the crisis. According to him delay in funds to Railways is the root cause of the crisis. He accuses the federal government for not releasing remarkable funds for the betterment of Pakistan Railways. All his plans may end in failure because of corruption in the management, financial problems, his ill-advised attitude and lack of vision. The efficiency of the railway minister is evident from its almost nil performance. He believes that two mafia gangs are very strong in Pakistan Railways but finds himself incapable to take any action against them. He seems to be too weak to solve the issues and problems faced by his ministry.

The Chief Justice has expressed his disapproval for the high-ups of Railways in the following comments: Ninety metric tons of silver worth millions was sold for mere Rs28,000 as scrap, while a light bulb worth Rs60 is being purchased at Rs400, whereas absence of maintenance turned expensive locomotives into junk one by one, besides a Grade-18 officer, a blue-eyed boy of the railways minister, is promoted to hold a Grade-20 post of secretary purchase. In the words of Chief Justice the electricity wires meant for electric trains from Lahore to Khanewal have been stolen. Moreover, he observed that tickets were sold in advance outside ticket counters and tickets were not available at railway stations. It is also in the notice of the apex court that land mafia has grabbed Pakistan Railways land in different areas of the country. He has already ordered the railways to approach the Sindh administration in this connection. Nonetheless, everybody knows the efficiency of the present Sindh government.

Railways needed Rs2.2 billion to pay the salaries and pension to its protesting employees but the government has not released enough money to overpower the deep financial crisis. The economy of the country is under severe pressure and the poor administration seems to be unable to solve the problem. The apex court has already remarked Railways should take steps to make it functional as early as possible. Sheikh Rashid Ahmad, former railway minister, blames corrupt officers of the department for the present situation in Pakistan Railways. According to him only 156 locomotives out of 500 are in normal working condition. According to his statement 15,000 freight wagons are not plying in the country and the business has gone in the hands of the private sector. He claims that 200 coaches and several locomotives, imported from China, could have been manufactured in the local Carriage Factory in Islamabad. Due to imported coaches and machinery several labourers have lost their jobs or sent on forced leave. A limited number of loaders have been appointed by the administration on the platforms to carry the luggage of the passengers. It is stated that a particular amount of money is received by the administration as a bribe from these poor loaders. In return they are allowed to receive hundred rupees from the passenger to carry the luggage.

A private firm has been working under the contract to transport goods including medicines, carpets, furniture and electronic appliances through Pakistan Railways. The monopoly of this firm is an obstacle in the free trade of different goods. Pakistan Railways should create competitive atmosphere to provide the customers with more facilities. Pakistan Railways losses have reached billions of rupees. It seems difficult to bring trains back on tracks in the present circumstances. The situation may not change unless corrupt high-ups are removed, suspended and dismissed from the services. To restructure and modernise Pakistan Railways under the present administration seems to be the dream of a mad man. Pakistan Railways is sinking in the sea of corruption as no serious efforts are being made to eradicate it from this department.Pakistan railway crisis sets in deepA shortage of locomotives has compelled Pakistan Railways (PR) to suspend more of its passenger trains.

The number of daily suspensions is alarmingly high.

Railways is finding it an increasing challenge to clear arrears of Pakistan State Oil for its fuel supply and pay staff salaries and pensions.

It maybe recalled that the recent failure to pay salaries and pensions of PR staff led to countrywide protests with the train service throughout the country suspended.President Zardari was compelled to hold an emergent meeting and direct a cash-strapped Ministry of Finance to release one billion rupees to enable PR to make payment to staff.

The PR staff reserves the right to resort to going on strike if all past dues are not cleared.The cause of the current state of affairs of PR is a continuous decline in income: during July-September 2011 PR income declined to 351.5 million rupees from 427.6 million rupees during the comparable period last year.

This decline is premised on a range of factors that include outright theft of locomotives and expensive equipment from Railways workshops, mismanagement associated with heavier reliance on bailout packages from the government that the cash-strapped treasury finds increasingly difficult to extend and sustained failure to restructure and modernise PR operations.Reports that a deal to purchase locomotives from a foreign country was compromised due to allegations of commission being sought, is symptomatic of the malaise that currently besets all our national institutions.

A way out is for the cabinet and all ministries to meticulously adhere to the public procurement rules and not seek a way out by invoking the national interest clause contained therein.The latest proposal by the PR to resolve its financial woes is to seek an Expression of Interest (EoI) from the private sector to run its freight operations.

Public-private partnership has been the strategy enunciated several times by President Zardari.

However, the government has failed to provide an enabling environment.

At present, the federal government is heavily reliant on domestic borrowing to meet the needs of its burgeoning budget deficit, a need that has been exacerbated by the decision of our economic team to abandon the stalled International Monetary Fund programme and not seek another a fact that has automatically led other bilaterals and multilaterals to suspend assistance for programme lending (budgetary support).

Thus an enhanced borrowing from the private commercial sector, instead of from the State Bank of Pakistan (IMF condition for the stalled programme), has led to crowding out of private sector borrowing.There is thus little likelihood that an EoI would be forthcoming anytime soon.

If one adds the ingredient of governments continued engagement in pricing of the service provided by PR to this state-owned entitys profile then it is a foregone conclusion that no one would be tempted to enter this arena.

The blueprint for PR reforms and restructuring like other badly managed loss-making state-owned entities is available

Railways financial crisis aggravating persistently: report

Pakistan Railways (PR) is in the grip of serious financial crisis which is persistently aggravating due to decline in the earnings caused mainly by the non-availability of locomotives, hike in diesel price, reduction in the number of passengers and goods trains and increase in the wages and pensions of the railways employees, said a report sent to National Assembly's secretariat.

According to the report, a copy of which is available with Business Recorder, the details of expenditure, earning and the subsidy provided by the government is as under: In financial year 2007-08 railways expenditures were Rs 37074 million against Rs 19975 millions earnings and subsidy provided by the government was Rs 7303 millions.

In 2008-09 Railways expenditures were Rs 46204 millions against Rs 23160 millions earnings and subsidy provided by the government was Rs 9034 millions.

In 2009-10 expenditures touched Rs 47094 millions against Rs 21887 millions income, while subsidy was Rs 18432 millions.

In 2010-11 PR expenditures were Rs 51859 millions against Rs 18740 millions earnings, while subsidy provided by the government was Rs 32642 millions.

The passengers and freight operations are shrinking as the department failed to meet the budget target of revenue.

During the last financial year 2010-11, railways earned Rs 18.74 billions against the budget's target of Rs 28.00 billions.

The situation has worsened to an extent that it would not be possible even to reach the figure of Rs 18 billions in current year.

During the ongoing financial year railways officials were expecting Rs 38 billion operational deficit.

PR is facing worst crisis in history.

The budget requirement for operation expenditures for the current year has been estimated at Rs 60.561 billion but finance ministry allocated only Rs 45 billion.

The comparison of demand and funds authorised by finance division for current year reflects that railways will never be able to meet the expenses on salary, fuel and pension.

As per the report, most of the operational assets of PR have become outdated, with 60 percent of locomotives, 70 percent freight wagons, 40 percent passenger coaches and 68 percent of its track have completed their life.

The crisis has adversely impacted the locomotives, reducing the fleet size to about 138 for train operations.

Due to the financial crisis, Pakistan Railways have also reduced its spending on track maintenance.

The Railways authorities are procuring only urgent and essential items for maintenance of railways infrastructure.

The difference between demand and allocation of funds for maintenance of infrastructure during last three years is as under: In financial year 2009-10 funds requirement was Rs 8935 million and allocation amount was only Rs 2500 millions and difference was Rs 6435 millions.

In financial year 2010-11 funds requirement was Rs 8935 millions, allocation Rs 1450 millions and difference Rs 7485 millions.

In financial year 2011-12 funds requirement was Rs 8935 millions, allocation was Rs 1500 millions and department had received 7435 millions against demand.

The report urged the government to take pragmatic measures to overcome the current financial crisis and requested release of Rs 11.1 billion as a bailout package approved by the federal cabinet.If the government release this amount, railways administration can rehabilitate 145 locomotives during the current financial year, it said.

An amount of Rs 1 billion may be released to Pakistan Railways for creating a fuel reserve, equivalent to one month of consumption to sustain its operationsMoreover the existing overdraft limit, which is currently capped at Rs 40 billion by the State Bank since January 2010, may be enhanced to Rs 50 billion to provide cushion to Pakistan Railways to meet the essential expenditure, the report concluded.Pakistan Railway working on rehabilitation of railway systemISLAMABAD: Pakistan Railways is working on various projects for rehabilitation and development of railways system.

An official of Pakistan Railways told APP that the projects of doubling of tack from Khanewal to Raiwind was initiated at the cost of Rs12617.400 million out of which only 90 km from Okara-Raiwind is left which will be completed in financial year 2011-12.

The rehabilitation of the existing track fromLahore to Rawalpindi-Peshawar will start with the help of Asian Development Bank in year 2011-12.

The project for realignment of track from Kaluwal to Pindora on Jhelum Rawalpindi section is likely to start in 2011-12.

The project of restoration of damaged assets on Mirpur Mathelo to Shahdadpur section and Bin Qasim stations damaged as aftermath of December 27, 2007 has been taken in hand and would be completed by year 2012.

Computerized online reservation system has been introduced on the Pakistan Railway system and so for 42 stations have been computerized while 10 more stations are planned in year 2011-12.

Installation of automated arrival departure board at major railway stations is likely to be completed in the financial year 2011-12.

The project of procurement of 150 new diesel locomotives at the cost of Rs55,488 million was approved by the ENEC in December 2010, contract agreement is being executed and the project is expected to mature with in three years time.

Contract agreement for manufacture procurement of 75 new diesel locomotives amounting to US $105.143 million was signed with Fong Fang Company of China.

Procurement manufacture of 202 new design passenger Coaches amounting to $ 134.452 million will be completed in year 2012-13.

Replacement of three break down rescue cranes and procurement of five sets of relief trains equipment at the cost of Rs1674 million was approved.

Rehabilitation and improvement of track from Quetta to Taftan bears the estimate cost of $671 million. The work will be completed in next 5 years subject to provision of funds from international and national financial institutions.

Copyright APP (Associated Press of Pakistan), 2011Pakistan Railways benefits from recent air scaresLAHORE:

The Bhoja Air disaster has provided a lifeline to the trouble-ridden Pakistan Railways (PR). The organisation seems to be benefitting from the aviation industrys recent woes as commuters distressed after the air crash and disturbed by recent incidents of plane tyre burst and fuel leakages are now taking chances on a grounded railway service.

In days following the crash, Pakistan Railways witnessed an unprecedented increase in its passengers, especially on the Business Express train being operated as a joint venture between the Lahore and Karachi junction.

With growing public distrust in air safety of private airlines and the national flag carrier, Pakistan International Airlines (PIA) operating at full capacity, commuters are now flocking to the Business Express train as an alternate mode of travelling between Karachi and Lahore.

According to Zaffar Chauhadry, Chief Executive Officer (CEO) of the Business Express, Karachi bound trains witnessed additional passengers on Monday.

On a regular Monday, the overall passenger occupancy is estimated around 40% which has increased up to 60% this week, Chauhadry added.

The increase in passengers, he said is definitely due to the recent air tragedies as people are now frightened of travelling via private airlines.

Despite having its own problems, and limited fleet of operational locomotives, the PR has managed to return life back to the platform of the otherwise vacant Lahore railway station.

We were scheduled to fly on Sunday via private airline, but when news of fuel tank leakage hit the news circuit we decided to travel via the rail network, said Jamal Shah, an apprehensive commuter travelling to Karachi along with his wife on the Business Express train.

I am not the only one to choose the Business Express, there are many families who have quit air travel for the time being due to the series of incidents, he added.

The recent incidents have tainted the airline industry, but railways have always carried more passengers during the summer season, mainly due to lower fares for air-conditioned coach services, said Pakistan Railways spokesperson Ijaz Shah.

Conversely, the road network has failed to attract skeptic air travelers, primarily due to the low quality of roads and longer distances, shortage of quality bus transportation companies and dilapidated highways.

Correction: An earlier version of the article misspelt Chauhadry as Chauhady. The correction has been made.

Published in The Express Tribune, April 24th, 2012

Pakistan Locomotive Factory, RisalpurThe Pakistan Locomotive Factory at Risalpur, a public spread on an area of 251 acres (102ha), was put into service in 1993 with the collaboration of Government of Japan at a total cost of Rs.2284.00 million, including a foreign exchange component of Rs.1496.00 million. The factory can produce two diesel-electric locomotives per month on single-shift basis, but this can be doubled by introducing a second working shift. The factory is equipped with the state-of-the-art equipment which can be employed in the building of diesel-electric locomotives of suitable horsepower, as well as electric locomotives with minor adjustments.

Since 1993, twenty three PHA-20 type 2,000hp (1,491kW) diesel-electric locomotives have rolled out of the factory. The ongoing project of 3,000hp (2,237kW) AGE-30 diesel-electric locomotives is at the verge of its completion, which is a milestone in the history of the factory. Apart from manufacturing new locomotives, the Pakistan Locomotive Factory has also successfully rehabilitated five diesel-electric locomotives of GRU-20 Type and manufactured other various spares/components for railway maintenance divisions and rehabilitation projects.

Accidents

Sukkur rail disaster

The Sukkur rail disaster occurred on January 4, 1990 in the village of Sangi near Sukkur in the Sindh Province of Pakistan. 307 people were killed making it Pakistan's worst rail disaster. The train (Bahaudddin Zakaria Express) concerned was on a 500-mile (800km) overnight run from Multan to Karachi and was carrying many more passengers in its 16 carriages than its 1408 seat capacity. It was supposed to pass straight through the village of Sangi but incorrectly set points sent it into a siding where it collided with an empty 67-car freight train at a speed of at least 35mph.4 July 2005

4 DnQuetta Express which was to run through Sarhad wasdetained on the main line duetoafault on the train brake system. The starter and advance starter were set togreen while the24 Dn train crew wereworking under the affected coach. In the meanwhile,16 DnKarachi Express was givenapaper lineclearat MirpurMathelo to proceed to Sarhad .

The24 Dn was leading the 16 Dn by half anhour.Withthisthing in mind the crew of 16 Dn misjudgedthe GREENstarter signalsas CLEAR and the RED outer and home as faulty.(AreportregardingthefaultysignalingsystematSarhadwaslodgedabout45daysago).The 24 Dn hadanoillittaillampwhichhas a visualrange of about200meters.Nowas the16 Dnapproached theOUTERthe red taillampof the 16 Dn brakevan loomedinto view. The 16 Dn crewappliedEMERGENCYBRAKEbutthedistancewas insufficient becauseof a lowbraking power.

Twocoaches of the 16 Dnwhich had draggingbrakeswereisolatedfromtherake'sbrakingsystemwhichwas notreportedtothedriverofthe16 Dn. So hewasunawareofthedepletedbraking powerof his16 Dn . Nevertheless , hisreflex action did save lives on the16 Dn.The16 Dnploughedintothedetained24 Dnbecauseofthefactthat theturnoutwas notsetforthe loopline While thedominoeffectwasinprogressthe7 Up Tezgamwas flyingthrough theUpmain line. Onlythe locomotive andthree coaches had crossed whenthecatapulted coaches ofthe24 Dnstartednudgingtherake ofthe7Up.

dust andblood, wailing humanity crushed steelbear testimonyto thearrogance of the Railway Ministry . More promises will followbut nobudget willbe sanctioneddue to the fact that nothing isleft after the major chunkis eatenup by Defence . Ghotki train crash In its worst accident in recent years, three passenger trains collided on 13 July 2005, derailing 13 carriages and leaving at least 120 dead. The Karachi Express ran into the back of the Quetta Express while it was stopped at a station near Ghotki, and the Tezgam Express travelling in the opposite direction hit several of the derailed carriages. According to officials, the conductor of the Karachi Express misread a signal.

Super Parcel Express

On 21 August 2005, the upcountry Super Parcels Express derailed while crossing the Malir Bridge near Landhi in the Karachi Division. Eight bogies were substantially damaged when an axle broke due to over loading. The rail traffic was suspended for 24 hours. All down trains were terminated at Landhi and the rakes and the locos made the turnaround from Landhi. 29 January, 20067 coaches of the 108 Down Lahore Express jumped the rails near Domeli, a station 33 kms short of Jhelum. 4 of the coaches slid into a 50 feet ravine over the sharp curve. The 108 Down is the fastest train on the PR network which covers the Rawalpindi-Lahore run in 3 hrs and 30 minutes. The exact cause of the crash is not yet known and never will be. The casualty rate is surprisingly low . It can be attributed to the crash safe design of the Chinese coaches

4 February, 2006

MULTAN - At least one person was killed and 30 others were injured when Lahore-bound Karakoram Express derailed near Kalanchwala Station, about 30 km from Bahawalpur, early on February 4, 2006.

The ill-fated train, carrying 933 passengers, was en route Lahore from Karachi when its eleven coaches suddenly derailed and the engine plunged into the earth at about 3:15 am between Samma Satta and Dera Nawab Sahab. At least five boggies overturned after the derailment. The train comprised of 15 bogies hauled by engine number 6020.

The PR authorities term the accident to be an act of sabotage since fish plates were removed before the arrival of the train. The rails are welded on this section therefore, the presence of the fish plate will remain a mystery.

10 February 2006A Chinese container train carrying chemicals collided with a stationary oil train in southern Pakistan on Friday, sparking a fire but causing no casualties, officials said. The accident happened at Ungar railway station around 180 kilometers (110 miles) north of Karachi.

The train carrying oil was on the track at the station when a northbound goods train hit it from behind and a fire broke out. 18 wagons of the goods train were burnt out in the blaze, and some oil was spilled at the scene.

The locomotive No.8201(HGMU30) hauling the chemicals special was completely gutted. According to a Pakistan Railways technical staff, the oil special was detained on the block section due to a brake fault while the chemicals special lost its vacuum on the steep down grade. Pakistan Railways' vacuum brake system is in total disarray and spares not readily available.

Cynics are of the view that the collision took place on a straight stretch of 10 kms and sufficient distance for the crew of the U/C to apply manual emergency braking.

Mehrabpur train derailment

On 19 December 2007, the train, Karachi Express, an express service from Karachi to Lahore, derailed near the town of Mehrabpur in the Sindh province of Pakistan. At around 2:25 a.m. local time, fourteen of the train's sixteen carriages left the tracks, some being mangled by the crash, others simply sliding down an embankment into the water. Sabotage and terrorism were ruled out as the reason for the crash, with officials believing a faulty track was the cause of the derailment.Triple Train Crash in Pakistan

Future developments

RestructuringIn March 2010, the Pakistani government announced plans to split Pakistan Railways into four privatised businesses; focussed on passenger operations, freight, infrastructure, and manufacturing. In February 2010, "unbundling" was proposed, with various activities being outsourced, privatised, or operated separately. However, complete privatisation has been ruled out.

New linesIn 2006 it was announced that a railway line between Gwadar and Quetta will be built and the Bostan-Zhob narrow-gauge railway line will be converted into broad gauge in 2007 at a cost of US$1.25billion. Plans to increase train speeds, install more lengths of double track and to convert the country's railways to standard gauge are also currently under way.

Track doubling

The Lodhran - Multan - Khanewal line (121km) was dual-tracked; work began in 2003 and completed on 16-03-2007.The Khanewal - Raiwind line (246km) is currently being doubled, at a cost of Rs.8.326 billion. The project commenced in July 2005. The section from Khanewal to Sahiwal (119km) has been opened as Double line section on 17-04-2010. The work of dualization of railway track from Sahiwal to Okara has completed and Okara to Raiwind Section is in progress and is expected to be completed by June 2012.

The following lines are planned to be doubled Shahdara -Bagh Lalamusa

Total Length 126km

Total Cost Rs.14136 million

Completion Period 03 years from the date of commencement

Shahdara Bagh - Faisalabad

Total Length 135km

Total Cost Rs.10486 million

Completion Period 03 years from the date of commencement

Lalamusa - Chaklala

Total Length 152km

Total Cost Rs.23770 million

Completion Period 04 years from the date of commencement

Golra Sharif - Peshawar Cantt

Total Length 160km

Total Cost Rs.19560 million

Completion Period 04 years from the date of commencement

Public-Private PartnershipPakistan Railways has faced severe financial and Management Crisis under the minister ship of Mr. Bilor. In those circumstances the Department has shake hand with Private Operators. In this pursuit Pakistan Railway has started several trains on Public-Private Partnership. Pakistan Business Express Train commenced its maiden Journey on February 3. 2012 and Shalimar Express resumed its operation on February 25, 2012.

High-speed railIn 2008, Pakistan Railways announced a plan of the construction of a $1billion high-speed railway line between Punjab and Sindh.

International lines Direct rail connections with China were proposed by Pervez Musharraf in 2006.

A container train service from Pakistan to Turkey has been launched In spring 2009, a rail link between Quetta and Zahedan (in Iran) was constructed, allowing Pakistan Railways direct access to Europe and the Middle East. A gauge changing station was constructed to the standard gauge at Zahedan and the Turkish Lake Van train ferry and the Marmaray Tunnel under the Bosphorus. It is planned to run container trains and through passenger trains. Pakistan plans to convert the Quetta line to standard gauge eventually. Chinese bank withholds funds for Pakistan RailwaysISLAMABAD: An internal rift between the directorates of Pakistan Railways has put the ministry at an awkward position jeopardising the release of a multi-million dollar tranche from China, a railways official said on Tuesday.The Exim Bank of China was supposed to issue a letter of commitment for the release of $40 million to a Chinese so that it may supply passenger coaches to Pakistan Railways on credit, but for issuing the commitment letter the bank charged a commitment fee of $1,039,988.

Pakistan Railways did not pay the fee as per agreement and the Bank withheld the letter of commitment for the payment of the first and second shipments of passenger coaches during January 2012, the official said requesting anonymity.

There is confusion amongst the offices of the Director General, Planning; Director Procurement (M&S); Managing Director CFI, and Director Finance as to which office of the railways will process the release of Commitment Fee to Exim Bank of China, the official said.

The Ministry of Finance had allocated the said amount and sent a written advice to the Ministry of Railways about four weeks ago, but there was no action due to the said confusion.

The Chinese firm in its last correspondence with the Ministry of Railways has urged it to clear the dues of the Exim Bank of China payable under an agreement of the Pakistan Railways with the China National Machinery Import & Export Corporation of China for the import of passenger coaches. Otherwise, it cautioned, such a delay of payment can seriously hinder future implementation of the project, especially the coming delivery and local manufacture of CKD (completely knocked down) units.

In October 2009, the Pakistan Railways had singed an agreement with the Chinese firm amounting to $134.452 million for procurement and manufacture of 202 new passenger carriages under which Railways was to import 52 completely built railway coaches during 2010/11 while the remaining 150 coaches were to be built by June 2013.

The Chinese firm has successfully delivered 55 coaches to the Pakistan Railways in the past couple of months and the dates of bill lading are January 1st and January 18, 2012, respectively for the first and second batch, and dates of arrival at Karachi port are February 2nd and 15th, 2012.World Bank may be asked to inject funds into Pakistan RailwaysISLAMABAD: The government, in close collaboration with the World Bank, is preparing a detailed road map for revitalizing the cash starved Pakistan Railways that requires a multi-billion dollar injection over the medium to long term to ensure a complete turnaround, official documents available with The News disclosed on Sunday.

The government had constituted a Core Team, as specified by the Planning Commission, which was assigned to formulate a Pakistan Railways Issue Note (PRIN) based on a rapid governance analysis. According to the PRIN executive summary Pakistan Railways (PR) has been facing serious crisis since 2007-08 as its passenger traffic reduced by 16 percent and freight traffic (on a tonne-kilometer basis) by 70 percent. Revenues of PR has fallen by 6 percent while working expense increased by 80 percent with labor related costs and pensions being 120 percent of revenue in 2010-11.

Under the current organization structure and financial arrangement, the executive summary states, it would be very difficult for PR to even return to break-even on working expenses without radical surgery. In the absence of substantial reforms, PR will almost certainly suffer a continuing decline, slowly but steadily becoming almost irrelevant to the general economy of the country.

According to the Core Team this needs to be so as PR has the fundamental requirement for a viable railways (long hauls, potential demand, good infrastructure and trained staff) exist, but the underlying problem that needs to be addressed is that PR cannot continue on the assumption that it is a government department administering a monopoly. Any monopoly is long gone and PR will go also unless it is restructured, both organizationally as a commercial business, it further recommended.

The PRIN draft summary states that such a situation requires both short and long term actions as in 2011, the number of locomotives available for use reduced by average of 10 each month. By August, only 8 locomotives were available for freight and 140 for passenger services compared to 100 and 170 respectively in 2008. The repair of locomotives needs to be accelerated as it will at least slow the financial hemorrhaging as each locomotive earns Rs70 million per year on passenger services and Rs120 million on freight services that is far more than the cost of the spare parts required to keep them in service and the fuel consumed if they do operate.

The summary poses question that in the medium term stable and predictable funding arrangements needs to be put in place but in the longer term the government must address that fundamental issue of whether PR is a government department or a commercial business. If it decides the former, PR will eventually wither away becoming an organization run solely for the benefit of staff. If it decides the latter, PR needs a major reorganization both organizationally and financially, so that it can compete effectively in the marketplace.

The Planning Commission in collaboration with Ministry of Railways and Pakistan Railways, supported by the WB, is preparing a strategy to outline steps required to revitalize the countrys rail system with focus on political economy of implementing its strategy.

On other side the Cabinet Committee on Restructuring (CCOR) decided to provide Rs.600 millions to Pakistan railways to pay the Wapda dues. The CCOR decided to increase the credit limit of Pakistan Railways from PSO and also decided to ensure subsidy to cover the bill of salaries and pension.

The CCOR also directed Pakistan Railways to utilize the funding from their PSDP allocations. The CCOR also discussed the fast track appointments of CEO and CFO and early establishment of board.

ConclusionThe political interference, corruption, poor maintenance of tracks, locomotives, couches, bridges, stations and mismanagement in almost every field are the major causes of failure of Pakistan Railways. Locomotives purchased from China had been broken down may be mentioned here that normally a locomotive consists of six traction motors while the Pakistan Railways is operating them with only three or four motors. This is the major cause of mid-way breakdown of trains.

The state of railways is very bad. It can never become a profitable organization, if we reduce its deficit, it would be an achievement Current Government blames previous governments for decades of failure to invest, but recognizes that the current administration is just as guilty. The cabinet approved emergency funding of $125 million for the railways in January but it has yet to be released by the finance ministry. The ministry requested 300 new engines to return to normal operations but they did not gave a single penny

The whole railway system is obsolete. Half of the total locomotives are out of order. Almost 86 % bridges are more than 100 years old. The trains, tracks and machinery are outdated or faulty. Pakistan needs 25 to 30 engines annually. Pakistan Railway is trying to repair, hire or lease locomotives in collaboration with the private sector. According to Haji Ghulam Ahmed Blour delay in funds to Railways is the root cause of the crisis. He accuses the federal government for not releasing remarkable funds for the betterment of Pakistan Railways. The efficiency of the railway minister is evident from its almost nil performance. He seems to be too weak to solve the issues and problems faced by his ministry.

Only 156 locomotives out of 500 are in normal working condition. 15,000 freight wagons are not playing in the country and the business has gone in the hands of the private sector. 200 coaches and several locomotives, imported from China, could have been manufactured in the local Carriage Factory in Islamabad. Due to imported coaches and machinery several laborers have lost their jobs or sent on forced leave..

Independent analysts estimate it will take at least five years and millions of dollars to haul the infrastructure into the 21st century. Constant neglect has led Pakistan Railways into such bad shape. An economy expert and former banker said. Pakistan Railway needs at least three to five years to revive the department, and inject at least Rs. 25 billion, for infrastructure and locomotive repair. Pakistan Railways losses have reached billions of rupees. It seems difficult to bring trains back on tracks in the present circumstances. The situation may not change unless corrupt high-ups are removed, suspended and dismissed from the services. To restructure and modernize Pakistan Railways under the present administration seems to be the dream of a mad man. Pakistan Railways is sinking in the sea of corruption as no serious efforts are being made to eradicate it from this department.

For improvement of Pakistan Railways industry, high priority should be given to administration department.

Privatization is the only solution to save Pakistan railway, according to people opinion

New trains should be introduced

RecommendationFollowings are some of the suggestions to improve the condition for railway system of Pakistan:

1- First of all government should eliminate corruption in railways sector. Corruption is the hazard that is destroying many sectors of Pakistani society.

2- Pakistan Railways should be privatized. This is also the possible solution of problem because currently government of Pakistan has to bear the huge losses monthly. Other benefits of privatization of Pakistan Railways include the increase in service quality and expansion of Railways because government has nothing to invest in Pakistan Railway.

3- Government should ask Chinese for help in order to make it profitable organization because China has made wonderful progress in railway industry. As China did in several other sectors including coal and nuclear power generation and manufacture of automobiles it has granted access to its enormous market by insisting on the transfer of technology. It has managed to develop its railway industry to the point at which it was able to out-compete the established systems in Europe and North America in winning the contract to build a high speed line connecting Mecca with Medina.

4- India is also making impressive strides in the railway sector. The underground system in Delhi has won the admiration of many foreign experts for its engineering as well as management. The inter-city system is being modernized in terms of both the quality of service on offer as well as the new equipment being used. The Indian and Chinese systems are by far the largest in the world and the two countries as a result of the advances they are making will come to dominate the world railway industry and business. Pakistan being a neighbor of these two rapidly growing and giant economies could benefit enormously from the development of the two systems.

5- Pakistan is blessed with coal reserves and a single Thar coal reserve of Sindh is about 850 Trillion Cubic feet which is more than oil reserves of KSA and Iran put together i.e. 375 billion barrels. Chinese and other companies had not only carried out surveys and feasibilities of this project but also offered 100 percent investment in last 7 to 8 years but the Petroleum Gang always discouraged them in a very systematic way. If these reserves are exploited properly then the deficiency of fuel can be catered for the railways.

The best solution of this problem is the privatization of Pakistan Railway. We can take the example of PTCL; before privatization PTCL's monthly losses were in billions. Today it is not only a profitable organization but also providing excellent services to the customers. Corruption in Pakistan Railways can only be removed by privatization of Pakistan Railways.

Referenceshttp://en.wikipedia.org/wiki/Pakistan_Railways

article Published in The Express Tribune, December 6th, 2011.

http://newsweekpakistan.com/scope/704

http://pakobserver.net/detailnews.asp?id=125216

http://www.newslinemagazine.com/2011/11/dead-mans-switch

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